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I would like to buy a condo for rental purpose, but I am short of 20% down payment. I can only afford around 10% down payment, considering other closing costs.
Maybe I can borrow some money out of my 401 account to make up 20%, but I prefer not to do so if 20% is not required.
Technically, I think I can afford to buy a rental property. Since buying my first house (primary residence one plus year ago), my income has increased over 20% and I have also saved up some money since then. Be precise, I don't feel burden to handle current mortgage, and feel I can handle another rental property if I can get the loan. I expect the future rent can pay off all the related cost (mortgage, tax, insurance, condo fee, maintenance, etc). As long as I can get the loan, it should not cause financial burden on me in the next few years.
I would like to buy a condo for rental purpose, but I am short of 20% down payment. I can only afford around 10% down payment, considering other closing costs.
Maybe I can borrow some money out of my 401 account to make up 20%, but I prefer not to do so if 20% is not required.
Technically, I think I can afford to buy a rental property. Since buying my first house (primary residence one plus year ago), my income has increased over 20% and I have also saved up some money since then. Be precise, I don't feel burden to handle current mortgage, and feel I can handle another rental property if I can get the loan. I expect the future rent can pay off all the related cost (mortgage, tax, insurance, condo fee, maintenance, etc). As long as I can get the loan, it should not cause financial burden on me in the next few years.
Thanks.
I don't want to be a buzzkill, but I believe investment property usually requires 25% down. If you have lender willing to go 20% you're doing good.
I don't want to be a buzzkill, but I believe investment property usually requires 25% down. If you have lender willing to go 20% you're doing good.
Even if my income has increased so much since first mortgage?
Mathematically, I can handle a rental property with zero down payment. Without down payment, the monthly mortgage payment is higher, but I can pull some money from my paycheck to cover the cost, the other portion comes from the rent of course.
Theoretically, lenders should consider buyer's ability to pay the mortgage, should not limited to 20% or 25% requirement.
What I am trying to say is is : I am ready to handle a rental property even if I don't have 20% down payment.
Lenders don't care if you're "ready" to own a rental. They care about their investment in you. You won't be living there so you won't be taking care of it day in and day out. You are going to put strangers in the house. The house is a larger risk of being foreclosed on because you already have a primary place to live, so they want you to have more skin in the game so you won't want to foreclose.
It has nothing to do with your raise or your readiness. You're only ready when you have the 20-25% to put down. I haven't seen anything below 20% in years, especially on a condo, so not sure where Pfhtex can get that. Around my area, you're lucky if you're not required to put down 30%.
I am also in the market looking for a condo for investment property. We have short listed also. I have talked to multiple lenders..most require 25% down payment for investment property, and some banks even asked for minimum 30% down payment. I dont know how can Pfhtex get 15% down payment???
Fannie (Direct) allows 15% down investment, but lawdy, that's a very expensive loan if you find someone to tango. Yikes! The loan level adjustments + PMI would price out in the 6's, and maybe even with points. It's in the Fannie Matrix.....don't think I would ever quote it, even if I had a price. Make that a highrise condo with the lowest acceptable credit score and I believe that will be the most expensive loan combination one could price out.
I am also in the market looking for a condo for investment property. We have short listed also. I have talked to multiple lenders..most require 25% down payment for investment property, and some banks even asked for minimum 30% down payment. I dont know how can Pfhtex get 15% down payment???
Not sure about 15% as I didn't inquire about it from my lender but told them I'll be putting down 20% and no issue there.
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